Good Progress on Holidays Act Review

Labour Minister Margaret Wilson
says a report on the Holidays Act from a joint
union-employer advisory group will allow good progress to be
made on a "complex and difficult" area of employment
relationships.

Issues covered in the report include
payment for work on public holidays, the "Mondayisation" of
holidays, rates of pay for working on holidays, clarity on
the observance of Waitangi and Anzac days, the use of
special leave and under what circumstances employees can be
required to take leave, or accumulate leave.

"Last year
there were more than 60,000 thousand calls to the Employment
Relations Service from employers and employees about the
Holidays Act. There’s an obvious need for change. The
report clarifies the issues, makes the positions of
employers and unions clear and makes policy recommendations
for government consideration," said Margaret Wilson.

The
group has also considered whether there should be an
increase in general annual leave entitlement. The employer
representatives thought the present situation should be
maintained; unions sought an increase to four weeks.

"The
Advisory Group has simply recorded the known positions of
unions and employers; the government has yet to consider
this issue," said Margaret Wilson.

Margaret Wilson thanked
the Group and its chair, Peter Chemis of Buddle Findlay.

"A close reading of the report shows that a great deal of
hard work and creative thought and compromise has gone into
the group's deliberations," said Margaret Wilson. The work
done by the group now allows the government to do its job
and produce clear, fair and effective policy decisions and
legislation for holidays. That work is already underway and
I hope to be able to take policy to Cabinet before Christmas
and introduce legislation next year".

Ends

SECONDREPORT OF THE

HOLIDAYS
ACTADVISORY GROUP

TO THE MINISTER OF
LABOUR

SEPTEMBER 2001

17 September, 2001TABLE OF
CONTENTS

1. INTRODUCTION 1

2. STRUCTURE OF THE
REPORT 1

3. JURY SERVICE 1

4. PUBLIC
HOLIDAYS 24.1 Should an employee get a paid public
holiday regardless of whether the public holiday falls on a
day that would otherwise be a working day for the
employee? 24.2 What mechanism should govern the days on
which the 11 public holidays are observed? 24.3 Should
the observance of the Christmas and New Year public holidays
be automatically transferred into the Monday to Friday
working week when those days fall in the weekend (i.e.
"Mondayised")? 24.4 Should an employer and employee be
able to agree to observe Waitangi Day and/or ANZAC Day on
alternative days? 34.5 Where an employee works on
Waitangi Day or ANZAC Day, should the employee's entitlement
to a day in lieu be lost if the employer pays the employee
more than ordinary rates of pay? 34.6 What rate of pay
should an employee be paid for a public holiday (where the
employee does not work on that public
holiday)? 34.7 When should an employee be paid for a
public holiday? 44.8 What rate of pay should an employee
be paid for working on a public holiday (in addition to a
day in lieu)? 44.9 Should an employee who works on a
public holiday, but who cannot show that it would otherwise
be a working day, be entitled to a day in lieu? 44.10 If
an employee works on any part of a public holiday should he
or she be entitled to a day in lieu? 44.11 Should an
employee who is on-call on a public holiday but who is not
called out be entitled to a day in lieu? 54.12 Who
should determine when a day in lieu is
taken? 54.13 Should days in lieu accumulate if not taken
within a specified period of time of them
accruing? 64.14 Should the time period that an employee
takes off on a day in lieu reflect the actual time period
worked on the public holiday? 64.15 What rate of pay
should an employee be paid for a day in lieu? 64.16 When
should an employee be paid for a day in lieu? 74.17 What
provision should be made for days in lieu not taken upon
termination of employment? 74.18 Should all employees,
regardless of where they are employed, be covered by the
same rules, or should the provisions dealing separately with
employees employed in a "factory" or "undertaking" remain as
they presently stand? 7

5. ANNUAL HOLIDAYS 95.1 Should
there be any change to the current entitlement of 3 weeks
annual holidays? 95.2 Should the entitlement to annual
holidays be based on "weeks" or should some other basis be
used? 95.3 Should there be a qualifying period before an
employee becomes entitled to annual holidays and if so, what
period? 95.4 Should provision be made to ensure that an
employee is able to take a portion of his or her entitlement
to annual holidays in one block? 95.5 Should an employee
be required to take annual holidays within a specified time
of them accruing and if so, should the employee forfeit
those annual holidays not taken? 95.6 What period of
notice should be given when an employer requires an employee
to take annual holidays at a particular
time? 105.7 Should restrictions be placed on an
employer's ability to cancel an employee's annual
holidays? 105.8 How should periods of authorised unpaid
leave (including parental leave, personal leave, ACC and
sick leave) affect the entitlement to annual
holidays? 105.9 How should annual holiday pay be
calculated in various circumstances? 115.10 Should
annual holiday pay be allowed to be paid to an employee
periodically in advance rather than at the time of taking
the annual holiday and if so, in what
circumstances? 115.11 Should the provisions that
contemplate an employer's ability to closedown its business
be continued and if so, should they be
changed? 135.12 Should an employer be able to require an
employee who is sick or injured, or whose dependant is sick
or injured, or who suffers a bereavement to take the period
off work as annual holidays? 135.13 Should an employee
who is sick or injured, or whose dependant is sick or
injured, or who suffers a bereavement be able to request,
and his or her employer be able to allow the employee, to
take the period off work as annual
holidays? 145.14 Should an employee who is sick or
injured, or whose dependant is sick or injured, or who
suffers a bereavement while on annual holidays be able to
take that period as special leave? 145.15 Where an
employment relationship is terminated and annual holidays
are owing, should the employment relationship cease at the
date of termination, or should it be deemed to continue
until the annual holidays expire? 145.16 On termination
of employment, should an employee be paid for a public
holiday which falls during the period of any unused annual
holidays added to the date of termination? 14

6. SPECIAL
LEAVE 156.1 Should there be any increase to the current
entitlement of 5 days special leave? 156.2 Should the
entitlement to special leave be split up into types of leave
such as sick leave, domestic leave and/or bereavement leave
(or Tangihanga leave) with separate entitlements for
each? 156.3 Should the entitlement to special leave be
expressed in "days" or "week(s)"? 156.4 Should there be
a qualifying period before an employee is entitled to
special leave and if so, what period? 156.5 On what
grounds should an employee be entitled to take special
leave? 156.6 Within what period of time, of the usual
time of starting work, should an employee be required to
give notice of the intention to take special
leave? 166.7 What rate of pay should an employee be paid
for a day taken as special leave? 166.8 Should an
employer be able to require an employee, who takes or wishes
to take special leave, to produce proof of the employee's
entitlement to it and if so, in what
circumstances? 166.9 Should an employee be able to
accumulate any unused special leave for use in any
subsequent leave period. 176.10 Should the entitlement
to special leave be in addition to any other special leave
type entitlements agreed to by an employer and
employee? 17

7. GENERAL AND ENFORCEMENT 187.1 Should
the Crown be bound by holidays legislation? 187.2 Should
"homeworkers" (and any other groups that do not fall within
the usual definition of "employee" but are deemed by
legislation to be "employees") be covered by holidays
legislation? 187.3 Where an employer dismisses an
employee but re-employs the employee within one month (or
some other period), should the employee's employment be
deemed continuous in respect of one or more of the
entitlements to public holidays, annual holidays and/or
special leave? (See section 20 of the Act.) 187.4 Where
employers wish to provide for more favourable entitlements
than the prescribed minimum, should the entitlements be
measured on a comparison of specific provisions or on a
package basis? 197.5 Should holidays legislation set out
examples to show how the provisions are to be applied to
different situations in different
workplaces? 197.6 Should an employer be under an
obligation to supply information to its employees on their
holiday and leave entitlements? 197.7 In what ways can
the entitlements to holidays and leave be
enforced? 20

The Advisory
Group on the Holidays Act first reported to the Minister of
Labour in early May 2001. On 17 May 2000 the Minister
requested the Advisory Group to reconvene and consider
whether it was possible to find further compromises within
the positions stated in its report. Subsequently, a
sub-committee of the Advisory Group met on several
occasions, made reasonable progress, and the Advisory Group
is now in a position to provide a second report.

2.
STRUCTURE OF THE REPORT

The structure of this report
reflects the deliberations of the Advisory Group and is
designed, where possible, to provide policy recommendations
to the Minister of Labour. For ease of comparison, the
structure follows that of the first report and the issues
are numbered in the same way. For completeness, if there
has been no change from the first report, the parties’
positions have been repeated in this second report.

3. JURY SERVICE

The Advisory Group has also
been asked to consider Jury Service. The views of the
Advisory Group are contained in Appendix 1 and follow the
numbering of the terms of reference (contained in Appendix
2). 4. PUBLIC HOLIDAYS4.1 Should an employee get a
paid public holiday regardless of whether the public holiday
falls on a day that would otherwise be a working day for the
employee?

(a) Employer Position: 
Continue with the current position, but where it is arguable
or unclear whether a day is an otherwise working day this
should be ascertained by application of a formula. For
example, in relation to a public holiday that falls on a
Monday, by asking whether the employee has worked on 4
Mondays over the previous 6 weeks, or 8 over the previous 12
weeks.

(b) Union Position: Consideration of
modifying the "otherwise working day" criteria has revealed
that it does not adequately address the position of
employees who are unfairly deprived of public holiday
entitlements (e.g. Tuesday to Sunday full time employees
miss out on all Monday public holidays). On the basis of the
Labour Party election policy:

"The improved
legislation will include: clear rights for all full
time workers to access 11 paid public holidays a year and
all part time workers to access their appropriate portion of
that"

 The Union proposes that officials undertake
further work to develop a mechanism by which this policy can
be implemented in a practical way. Employees who work 5 or
more days per week, or who work full-time ( 30 or more hours
per week) should be entitled to 11 paid public holidays, and
part-time workers on a proportionate basis.

4.2 What
mechanism should govern the days on which the 11 public
holidays are observed?(a) Policy
Recommendation: Continue with the current
position: Unless an employer and an employee agree
otherwise, the public holidays to be observed by default are
Christmas Day, Boxing Day, New Year's Day, 2 January (or
some other day in its place); Good Friday; Easter Monday;
ANZAC Day; Labour Day; the birthday of the reigning
Sovereign; Waitangi Day; the day of the anniversary of the
province (or some other day in its place) (section
7A(2)).

4.3 Should the observance of the Christmas and New
Year public holidays be automatically transferred into the
Monday to Friday working week when those days fall in the
weekend (i.e. "Mondayised")?


Where work performed in the enterprise is normally confined
to the Monday to Friday working week, Christmas and New Year
public holidays should be automatically transferred when
those days fall in the weekend. If work is normally
performed in the enterprise on a Saturday and/or Sunday,
Christmas and New Year public holidays should be observed
where they fall.

(c) Union Position: Enact
the proposal in the Holidays draft Bill prepared by the
Department of Labour in 1998 under the previous Government :
The Christmas and New Year public holidays are observed on
the days they fall for employees who normally work on the
weekend and transferred to the following Monday/Tuesday for
employees who do not normally work on the weekend.

4.4
Should an employer and employee be able to agree to observe
Waitangi Day and/or ANZAC Day on alternative days?

(a)
Policy Recommendation: Waitangi Day and ANZAC
Day be observed on the days they fall (i.e. not
"Mondayised") but the employer and employee may agree to
observe them on alternative days.

4.5 Where an employee
works on Waitangi Day or ANZAC Day, should the employee's
entitlement to a day in lieu be lost if the employer pays
the employee more than ordinary rates of pay?

(a) Policy
Recommendation (subject to Employer exception see
below): Waitangi and ANZAC Days should be
consistent with other public holidays. If an employee works
on Waitangi Day or ANZAC Day the employee is entitled to a
day in lieu if the day is an otherwise working day,
irrespective of the pay he or she receives.

(b)
Employer Exception: Subject to the rate of pay
for working on a public holiday being rate and a half,
unless negatived or varied by agreement (see 4.8
below).

4.6 What rate of pay should an employee be paid
for a public holiday (where the employee does not work on
that public holiday)?

(a) Policy Recommendation (subject
to Employer exception see below): Codify Ports
of Auckland based on the following principles:

– an
employee must be paid what he/she would receive for an
ordinary working day;

– the pay for an ordinary working
day is a matter of construction of each particular
employment agreement;

– there is no scope for bargaining
for a lesser special rate solely for the purposes of
calculating statutory holiday pay;

– anything which is
clearly payable only in defined circumstances or at defined
times is excluded, such as overtime, bonuses and allowances.
Productivity and incentive based payments which are
dependent on actual working results need not be notionally
calculated and paid;

– allowances that are payable as of
course should be distinguished from those payable only in
particular circumstances, even if they occur regularly and
even if they would have been payable if the employee had
worked that day.

(b) Employer Exception:


The third point (above) does not include situations where
there is a negotiated ordinary rate of pay applicable to all
non-working time when payment for work is based, for
example, on piece rate, productivity incentive based
payments, commission or bonus payments.

4.7 When
should an employee be paid for a public holiday?(a)
Policy Recommendation: An employer must make a
payment in respect of a public holiday in the pay that
relates to the period in which the public holiday
occurs.

4.8 What rate of pay should an employee be paid
for working on a public holiday (in addition to a day in
lieu)?

(a) Employer Position: The rate of pay
for an employee who works on a public holiday should be rate
and a half, unless negatived or varied by agreement (i.e. by
default). The current position is that "factories and
undertakings" defined in the Factories and Commercial
Premises Act (since repealed) require double rate to be paid
for time worked on public holidays with the ability to
negative or vary that rate by agreement. This is a
relatively common practice. Workplaces that are not
factories or undertakings are not required to pay anything
beyond ordinary rate.

(b) Union Position: The
rate of pay for an employee who works on a public holiday
should be rate and a half which is consistent with the
Labour Party 1999 election policy:

"The improved
legislation will include: a minimum additional payment
plus a day in lieu for those who work on a public
holiday"

and Alliance 1999 Election
Policy.

4.9 Should an employee who works on a public
holiday, but who cannot show that it would otherwise be a
working day, be entitled to a day in lieu?

See 4.14.10
If an employee works on any part of a public holiday should
he or she be entitled to a day in lieu?

(a) Employer
Position: Where an employee's work day falls
within one calendar day (i.e. between midnight and
midnight), and the employee works on any part of a public
holiday, then the employee should be entitled to a day in
lieu where the day is otherwise a working day for the
employee.

 Where an employee's work day/shift
straddles 2 calendar days, the employee shall be entitled to
the provisions of this section only where the work performed
on the public holiday falls within the definition of that
employee's 'day' of work, as provided in his or her
employment agreement. Where the employment agreement
provides no definition of an employee's day of work, that
day, for the purposes of this section, shall be the day on
which the employee works the greater number of hours. Where
an equal number of hours is worked by the employee on each
calendar day, the day of work shall be the day on which work
commences.

(b) Union Position: If an employee
works on any part of a public holiday which is normally a
working day for the employee he/she is entitled to a day in
lieu. The entitlement to a day in lieu is regardless of
whether there are rules designating the day that the shift
belongs to, because that is not consistent with the Act
which requires that if an employee works on any part of a
public holiday he or she has not had a “whole holiday” and
is entitled to a day in lieu. (codify Lyttelton Port
Company).

4.11 Should an employee who is on-call on a
public holiday but who is not called out be entitled to a
day in lieu?

(a) Policy Recommendation:
Codify Guardian Alarms based on the following
principles:

– Being on call does not in itself entitle an
employee to a day in lieu;

– An employee is entitled to a
day in lieu where the day is an otherwise a working day and
the nature of the restriction on the employee's freedom of
action are such that, for all practical purposes, the
employee has not had a whole holiday.

4.12 Who
should determine when a day in lieu is taken?

(a) Employer
Position: by agreement between an employer and
an employee;

 failing agreement and within 12
months of the entitlement accruing, it should be the
employee's choice, taking into account the employer's views
as to its convenience and by giving 14 days
notice;

 if the employee does not take a day in
lieu within 12 months of the entitlement accruing, the
employer may direct the employee to take the day in lieu by
giving 14 days notice;

 if the employee does not
take a day in lieu within 12 months of the entitlement
accruing, the employee may request or the employer may offer
to exchange the day in lieu for cash.

(b) Union
Qualification: The same as the employer position
except that:

– If the employee does not take a day in lieu
within 12 months of the entitlement accruing and the
employer directs the employee to take the day in lieu by
giving 14 days notice the employee may nominate a day, such
day to be within 21 days of receipt of the employer notice,
for lieu day purposes and may choose to either take that
nominated day as a lieu day or exchange the day in lieu for
cash.

– There should be no requirement for the employee to
give 14 days notice as this would be inconsistent with the
principle that an employee determines the day on which the
lieu day is observed and a practice has developed of taking
such days for domestic crisis purposes e.g.
bereavements.

– The agreed position, as qualified by the
union position as set out above is subject to agreement on
the union position in 4.8. Failing agreement the union
position is to retain the status quo of unlimited
accumulation and employee choice.

4.13 Should days in lieu
accumulate if not taken within a specified period of time of
them accruing?

(a) Policy Recommendation: The
right to a day in lieu does not lapse if not taken (note
that if the employee does not take a day in lieu within 12
months of the entitlement accruing, the employer may direct
the employee to take the day in lieu on 14 days notice. See
4.12 above).

4.14 Should the time period that an employee
takes off on a day in lieu reflect the actual time period
worked on the public holiday?

(a) Policy
Recommendation: Codify the current position:
The time period that an employee takes off on a day in lieu
does not reflect the actual time period worked on the public
holiday. The employee is entitled to a whole day off
regardless of the actual time period worked on the public
holiday (e.g. if an employee works for one hour on a public
holiday the employee is entitled to a whole day off on the
day taken as the day in lieu, even if the employee would
normally work 8 hours that day).

4.15 What rate of pay
should an employee be paid for a day in lieu?

(a) Employer
Position: Apply the principles in Ports of
Auckland (see 4.6 above). Where it is unclear or arguable
what an ordinary day is, the payment should be based on the
average ordinary hours worked per day in the previous four
pay periods.

(b) Union Position:

 Apply the
principles in Ports of Auckland (see 4.6 above) to the lieu
day nominated by the employee.

4.16 When should an
employee be paid for a day in lieu?

(a) Policy
Recommendation: An employer must make a payment
in respect of a day in lieu in the pay that relates to the
period in which the day in lieu is taken.

4.17 What
provision should be made for days in lieu not taken upon
termination of employment?

(a) Policy
Recommendation: Where employment is terminated
on notice by either party, the employer may reduce the
requirement for the employee to be present at work by the
number of lieu days accrued by the employee.


Where employment is terminated and the employer makes a
payment in lieu of notice, the employer may not take the
approach in (a) above and must make a payment in relation to
those lieu days.

4.18 Should all employees, regardless of
where they are employed, be covered by the same rules, or
should the provisions dealing separately with employees
employed in a "factory" or "undertaking" remain as they
presently stand?

Separate provisions for employees
employed in a “factory” or “undertaking” (a) Policy
Recommendation:

 The factories and undertakings
distinction should be removed but subject to the parties
respective positions as set out in
4.8.

Proportionate payment for a public holiday
(a) Policy Recommendation: The proportionate
payment provisions should be removed. (This is subject to
codification of the rule that on termination of employment,
an employee should be paid for a public holiday that occurs
in the period commencing on the date of termination and
extending for the period of accrued annual leave (see 5.16
below).

Default penal rates for public holidays

(a)
Employer Position: The rate of pay for an
employee who works on a public holiday should be rate and a
half, unless negatived or varied by agreement (i.e. by
default). (See 4.8.)

(b) Union Position:

 The
rate of pay for an employee who works on a public holiday
should be rate and a half. (See 4.8.)

Default
penal rates for Sundays

(a) Employer Position:
The provisions for providing for default penal rates for
working on a Sunday should be removed. Sunday is not a
holiday and has no place in holidays legislation.

(b)
Union Position:

 The rate of pay for working on a
Sunday should be rate and a half unless negatived or varied
by agreement (i.e. by default).

Special
provisions: For night workers in a newspaper
factory (s 28)(a) Employer Position:

 For
industry to specifically decide and submit on.

(b) Union
Position:

 Remove the provisions.

 For
dairy workers (s 9(4))(a) Employer position:


For industry to specifically decide and submit on.

(b) Union position:

 Continue with current
position.

5. ANNUAL HOLIDAYS5.1 Should there be any
change to the current entitlement of 3 weeks annual
holidays?

(a) Employer Position:

 Retain the
current position.

(b) Union Position:

 The
minimum annual leave entitlement should be increased to four
weeks in accordance with the 1999 election policies of the
Labour Party and the Alliance.

5.2 Should the entitlement
to annual holidays be based on "weeks" or should some other
basis be used?

(a) Policy Recommendation:


Continue with the current position: The entitlement to
annual holidays is based on "weeks" (subject to Employer
qualification see below).

(b) Employer
Qualification:

 The legislation should, for
operational purposes, clarify that an employment agreement
may specify entitlement to annual holidays in days or weeks
(but must not effect a reduction in entitlement of any
employee). This could be achieved in the definition of
"week".

5.3 Should there be a qualifying period before
an employee becomes entitled to annual holidays and if so,
what period?

(a) Policy Recommendation:


Continue with the current position: An employee becomes
entitled to annual holidays after 12 months
employment.

5.4 Should provision be made to ensure that an
employee is able to take a portion of his or her entitlement
to annual holidays in one block?

(a) Policy
Recommendation:

 Continue with the current
position: An employer shall allow an employee at least 2
uninterrupted weeks of annual holidays, commencing within 6
months of becoming entitled, and shall allow any balance to
the employee within 12 months.

5.5 Should an employee be
required to take annual holidays within a specified time of
them accruing and if so, should the employee forfeit those
annual holidays not taken?

(a) Policy
Recommendation:

 The entitlement to annual
holidays remains in force until it is taken (note this is
subject to the right of the employer to direct see 5.6
below).

5.6 What period of notice should be given when an
employer requires an employee to take annual holidays at a
particular time?

(a) Employer Position:

 In the
absence of agreement, the employer must give the employee 14
days notice of the date upon which the employee is required
to take annual holidays.

(b) Union Position:

 In
the absence of agreement, the employer must give the
employee at least 14, and where possible 21 days notice of
the date upon which the employee is required to take annual
holidays.

5.7 Should restrictions be placed on an
employer's ability to cancel an employee's annual
holidays?

– If annual holidays are
cancelled an employee may bring an action against his or her
employer for breach of the duty to act in a fair manner:
Vining v Air NZ (unreported, Colgan J, 26 May 1995, AEC
41/95) or to act in good faith under the Employment
Relations Act 2000.

 Entitlement to annual holidays should
not accrue while an employee is on parental leave.

(b) Union Position:

 Entitlement to
annual holidays while an employee is on parental leave
should be addressed in the context of the Paid Parental
Leave policy development process.

Unpaid leave for
personal reasons(a) Employer Position:
Entitlement to annual holidays should not accrue while an
employee is on unpaid leave for personal reasons for more
than one week.

(b) Union Position:

 Subject to
other applicable legislation the employer and employee may
agree that entitlement to annual holidays should not accrue
while an employee is on unpaid leave for personal reasons
for more than one week.

ACC(a) Employer
position: An employee should not accrue annual
holidays when he or she is on ACC or unpaid sick leave for
more than one week.– An employee is not providing any
services so should not accrue annual holidays.

– An
employer may be more inclined to terminate an employee’s
employment when that person is on long term ACC to avoid an
annual holiday liability, rather than work with the employee
towards his or her rehabilitation and return to work.

(b)
Union position: Continue with the current
position.– ACC is a no fault system so the employee
should not be further penalised.

5.9 How should annual
holiday pay be calculated in various circumstances?

(a)
Policy Recommendation (subject to Employer
Qualification):

 Further work should be undertaken
by officials, with the primary objective being to simplify
the current position without diminishing current
entitlements.

(b) Employer Qualification:


Where holidays are taken in advance there should not be a
requirement to recalculate holiday pay at the date when the
holiday actually becomes due – for example where the
employee has received an increase in remuneration during the
period.

5.10 Should annual holiday pay be allowed to be
paid to an employee periodically in advance rather than at
the time of taking the annual holiday and if so, in what
circumstances?

(a) Employer Position:

 Codify
Gladstone (annual holiday pay due on termination may be paid
periodically in advice) and Drake (periodic pay allowable
for employees of less than 12 months).


Employer clause

Where any person is employed by an
employer either as a casual, temporary, or fixed term
employee or as a piece worker, that employee may agree with
the employer in writing, or as part of the applicable
collective employment agreement, that the
employer:

(a) Pay 6% of the gross pay to such an employee
at the termination of the employee's employment, in which
case the payment of holiday pay shall be satisfied and
provision of any annual holiday shall not be required;
or

(b) Add a separately identified amount equal to 6% of
gross earnings to the employee's total hourly or weekly pay
in satisfaction for any requirement to provide either
payment of holiday pay or an annual holiday;

(c) Where an
employee does not agree in writing under paragraph (b)
above, the provisions of paragraph (a) shall
apply;

(d) Should an employee who has agreed with the
employer pursuant to paragraph (b) above obtain regular
employment with the same employer either on a part-time or
on a full-time basis, the entitlement to pay for leave under
the general provisions of this Act [i.e. three weeks after
twelve months] shall be offset by the amounts paid pursuant
to paragraphs (a) or (b) above.

DEFINITION OF CASUAL
EMPLOYEE

Casual Employee for the purpose of this Act is a
person employed to work on an as and when required basis
with no guaranteed hours or guaranteed pattern of
work.

FIXED TERM EMPLOYEE

Fixed-term Employee for the
purposes of this Act is an employee who is employed for a
specified period of time or for the completion of a
particular task.

PIECEWORKER

Pieceworker for the
purposes of this Act is a person employed and paid for work
on a per piece basis.

Note: This draft clause is included
as indicative drafting only

(b) Union Position:


Payment of holiday in advance should be limited to casual
employees as per the following draft clause:

Holiday pay
normally not to be included in ordinary pay An
employer must pay annual holiday pay only when annual
holidays are being taken or when the employment of the
employee comes to an end.

When holiday pay may be
included in normal pay1. Despite section xx, an employer
may pay annual holiday pay before holidays are taken, but
only if-

(a) The employee is a casual employee; and

(b)
The employee agrees in writing; and

(c) The annual holiday
pay is paid as an identifiable addition to the employee's
ordinary pay; and

(d) The annual holiday pay is paid at a
rate of not less than 8 per cent 1 of the employee's gross
hourly or weekly earnings..

2. For the purposes of this
section a "casual employee" is an employee who is employed
to work on an irregular basis, with no fixed pattern of
work and where any one engagement is not longer than one
week.. For the avoidance of doubt nothing in this definition
affects the meaning of the words “casual employee” in any
other employment context.

3. The agreement of an employee
under subsection 1(b) must be entered, at the time of the
agreement, by the employer in the leave record.

4. Annual
holiday pay paid under subsection 1 must be recorded by the
employer-

(a) In the annual leave record; and

(b)
Clearly and separately identified In any pay advice or pay
slip which is provided to the employee and which related to
the pay that includes the annual holiday pay.

5. If any
of subsections 1 to 3 above have not been complied with,
money paid as annual holiday pay before annual holidays are
taken must be treated as part of the employee's gross
earning and annual holiday pay remains payable to the
employee.

6. The employee may withdraw agreement at any
time by giving 14 day's notice to the employer.

1 The use
of 8 per cent is based on the expectation that annual
holidays entitlement will be increased to 4 weeks.

Note:
This draft clause is included as indicative drafting only

5.11 Should the provisions that contemplate an
employer's ability to closedown its business be continued
and if so, should they be changed?

(a) Policy
Recommendation:

 Continue with the current
position (s18 of the Holidays Act).

5.12 Should an
employer be able to require an employee who is sick or
injured, or whose dependant is sick or injured, or who
suffers a bereavement to take the period off work as annual
holidays?

Agreed that this is not an issue in itself and
that it is captured by 5.13 below.

5.13 Should an employee
who is sick or injured, or whose dependant is sick or
injured, or who suffers a bereavement be able to request,
and his or her employer be able to allow the employee, to
take the period off work as annual holidays?

(a)
Policy Recommendation:

 An employee who is sick or
injured, or whose dependant is sick or injured, or who
suffers a bereavement should be able to request, and his or
her employer should be able to allow the employee, to take
the period off work as annual holidays.

5.14 Should an
employee who is sick or injured, or whose dependant is sick
or injured, or who suffers a bereavement while on annual
holidays be able to take that period as special leave?

(a)
Policy Recommendation:

 An employee who is sick or
injured, or whose dependant is sick or injured, or who
suffers a bereavement while on annual holidays is not able
to take that period as special leave, unless otherwise
agreed.

5.15 Where an employment relationship is
terminated and annual holidays are owing, should the
employment relationship cease at the date of termination, or
should it be deemed to continue until the annual holidays
expire?

(a) Policy Recommendation:

 Codify the
current position: The employment relationship ceases at the
date of termination and is not extended to the end of the
unused annual holiday entitlement: Parker v Auckland
Regional Council [1993] 1 ERNZ 152 (EC).

5.16 On
termination of employment, should an employee be paid for a
public holiday which falls during the period of any unused
annual holidays added to the date of termination?

(a)
Policy Recommendation:

 Codify the current
position: If a public holiday falls within the period of
unused annual holidays added to the date of termination then
the employee is entitled to be paid for the public holiday:
Northern Hotel etc IUOW v Dominion Breweries Ltd [1988]
NZILR 810 (LC).

6. SPECIAL LEAVE

6.1 Should there be
any increase to the current entitlement of 5 days special
leave?

(a) Employer Position:

 The entitlement
to special leave should be expressed as "one week" to enable
the leave to be pro rated for less than full-time
employees.

(b) Union Position:

 An employee
should be entitled to 5 days sick/domestic leave (with no
pro rating) and a two-tiered bereavement leave entitlement
(see 6.5 below).

6.2 Should the entitlement to special
leave be split up into types of leave such as sick leave,
domestic leave and/or bereavement leave (or Tangihanga
leave) with separate entitlements for each?

(a) Employer
Position:

 Continue with the current position but
the entitlement should be expressed as "one week" (see
6.1(a) above).

(b) Union Position:

 Special
leave should be split into sick/domestic leave and
bereavement leave as per Labour Party and Alliance 1999
Election policy.

6.3 Should the entitlement to special
leave be expressed in "days" or "week(s)"?

(a) Employer
Position:

 The entitlement should be expressed as
one "week" rather than 5 "days" and apportioned on the basis
of the number of days worked each week.

(b) Union
Position:

 Continue with the current
position.

6.4 Should there be a qualifying period before
an employee is entitled to special leave and if so, what
period?

(a) Policy Recommendation:

 Continue
with the current position.

6.5 On what grounds should an
employee be entitled to take special leave?

(a) Employer
Position:

Employer Clause:

Special leave under this
section may be taken only when:

(a) The employee is sick;
or

(b) The spouse of the employee is sick; or

(c) A
dependent child or dependent parent of the employee or of
the spouse of the employee is sick; or

(d) The employee
suffers bereavement.

For the purposes of this section
"dependent" in relation to a child of the employee or the
employee's spouse means a child under the age of 16 years
and in relation to a parent means a parent who is reliant on
the employee for care.

(b) Union Position:


Sick/Domestic Leave

– Enact the proposal in the 1998
Holidays draft Bill in relation to sick and domestic leave
but add that an employee should also be able to take
sick/domestic leave when a person becomes dependent on the
employee because they are sick or injured.


Bereavement leave

– 3 days bereavement leave on the death
of an employee’s parent, child, sibling, partner,
grandparent, grandchild, and parent of partner.

– Retain
current discretion for employer to grant one days
bereavement leave on any other occasion where the employer
accepts the employee has suffered a bereavement, and add a
requirement to take into account cultural requirements.

–
Re-title as “Tangihanga - Bereavement Leave”.

6.6 Within
what period of time, of the usual time of starting work,
should an employee be required to give notice of the
intention to take special leave?

(a) Policy
Recommendation:

 The employee must notify the
employer before his or her scheduled start time or as soon
as practicable thereafter.

6.7 What rate of pay should an
employee be paid for a day taken as special leave?

(a) Policy recommendation:

 Payment for special
leave should be the same as for public holidays (see 4.6
above).

6.8 Should an employer be able to require an
employee, who takes or wishes to take special leave, to
produce proof of the employee's entitlement to it and if so,
in what circumstances?

(a) Employer Position:


An employment agreement should be able to set out the
requirements for an employee to provide proof of the
employee's entitlement to special leave.

(b) Union
Position:

 Continue with the current position.

6.9 Should an employee be able to accumulate any unused
special leave for use in any subsequent leave period.

(a)
Employer Position:

 Continue with the current
position.

(b) Union Position:

 An employee
should be able to accumulate any unused sick/domestic leave.

6.10 Should the entitlement to special leave be in
addition to any other special leave type entitlements agreed
to by an employer and employee?

(a) Policy
Recommendation:

 The entitlement to special leave
should not by default be in addition to any other special
leave type entitlements agreed to by an employer and
employee.

7. GENERAL AND ENFORCEMENT

7.1 Should the
Crown be bound by holidays legislation?

(a) Policy
Recommendation:

 The trend in recent years has
been to align the State sector and the private sector under
common employment legislation. Therefore the Crown should
be bound by holidays legislation, provided that:

– there
are clear grounds for some specific exemptions (e.g. sworn
members of the Police and the Armed Forces).

– the
extension of the legislation to the Crown should not of
itself affect existing entitlements in the State sector.

–
there may need to be a transition period to enable State
sector employers to comply with any new legislation (e.g. 12
months).

7.2 Should "homeworkers" (and any other groups
that do not fall within the usual definition of "employee"
but are deemed by legislation to be "employees") be covered
by holidays legislation?

(a) Employer Position:


Holidays legislation should specifically exclude any
individuals who are “deemed” to be employees through the
operation of the definition of “homeworker” in the
Employment Relations Act 2000.

(b) Union
Position:

 Continue with the current position:
Homeworkers are deemed to be employees for purposes of
holidays legislation.

7.3 Where an employer dismisses an
employee but re-employs the employee within one month (or
some other period), should the employee's employment be
deemed continuous in respect of one or more of the
entitlements to public holidays, annual holidays and/or
special leave? (See section 20 of the Act.)

(a) Policy
Recommendation:

 Clarify that if employment is
terminated, and the employee is re-employed within one
month, employment is not to be deemed continuous for the
purposes of annual holidays, but may be for other service
related benefits. The intention is to avoid double dipping
where a genuine fixed-term employee becomes permanently
employed.

 Where an employee is dismissed and
re-employed, employment should be deemed continuous if the
purpose of the dismissal was to evade statutory obligation.
In the case of a dismissal and re-employment the employment
shall for the purposes of section 11 of this Act and for
calculating holiday pay be deemed to have continued as if
the dismissal had not occurred, unless a Labour Inspector
certifies in writing that he/she is satisfied that in
terminating the employment the employer acted in good faith
and not for the purpose of evading or attempting to evade
any obligation imposed by this Act or any payment required
to be made under it.

7.4 Where employers wish to provide
for more favourable entitlements than the prescribed
minimum, should the entitlements be measured on a comparison
of specific provisions or on a package basis?

(a) Employer
Position:

 The entitlements offered by an employer
should be measured against each of the statutory
entitlements (public holidays, annual holidays and special
leave) on a package basis.

(b) Union Position:


Enact the proposal in the 1998 Holidays draft Bill:

– An
employment agreement has no effect to the extent that it
excludes or restricts a statutory entitlement.

7.5 Should
holidays legislation set out examples to show how the
provisions are to be applied to different situations in
different workplaces?

(a) Policy
Recommendation:

 Educative material and booklets
produced by the Department of Labour should include examples
and draft clauses – if developed in consultation with
Business NZ and NZCTU.

7.6 Should an employer be under an
obligation to supply information to its employees on their
holiday and leave entitlements?

(a) Employer
position: Employers should not be under any
statutory obligation to supply general information on
Holidays Act entitlements as to do so is a significant
compliance issue for small employers. However, employers do
recognise the practical need to provide information to
individuals on their actual entitlement.(b) Union
position: An employer should have to provide
information to its employees on their holiday and leave
entitlements.– this is particularly important to young
employees who are most vulnerable as they often do not know
what their entitlements are.

– may reduce compliance
costs.

– basic information could be produced by the
Department of Labour for use by employers and may be
contained on the Department of Labour’s website.


Standard clauses setting out an employee’s entitlements may
be included as an appendix to the legislation. They could
be produced in a form that allowed the clauses to be
inserted directly into employment agreements.– may
reduce compliance costs.

– the main provisions of the
legislation could be reproduced as standard clauses.

– the
standard clauses may be contained on the Department of
Labour’s website for downloading by employers, employees and
their representatives.

– this issue may be looked at by
the Employment Rights Unit (if established) to help reduce
compliance costs.

7.7 In what ways can the entitlements to
holidays and leave be enforced?

(a) Policy
Recommendation:

 Employers and employees and their
representatives can take recovery or compliance action to
ensure that entitlements and obligations are met.

 Statutory officers can take penalty actions and
this should include a system of administrative penalties
(instant fines) for breaches, subject to normal rights of
appeal and review.

 Specific reference to a
separate holidays book may not be appropriate provided that
clear and accessible records are maintained.

APPENDIX
ONEJURY SERVICEThis section follows the questions
set out for consideration in the terms of reference.

1.
Should there be a right to leave for jury service and, if
so, for how long?(a) Recommendation:
Employees should have a right to leave for jury service, for
the length of the trial or period that they are required to
serve, subject to extenuating circumstances affecting either
the employee or the employer.

 The Advisory Group
agrees with the Law Commission's recommendation that it
should be an offence for an employer to dismiss or otherwise
disadvantage an employee for reason of the employee's
absence because of jury service.

2. How should any
provisions regarding jury service leave relate to the Juries
Act 1981 and Jury Rules 1990?(a)
Recommendation:  All provisions regarding jury
service leave, including payment, should be contained in the
Juries Act, and not in employment legislation such as the
Holidays or Employment Relations Act.

3. Should jury
service leave be paid and if so, how (i.e. employer paid or
tax funded), and at what rate (i.e. replacement wages or
fees)?(a) Agreed general position:  Jurors
should receive some payment for jury service.

(b) Employer
Position:  Paid jury service leave should not
be a legislative requirement. Jury service is a community
benefit and should be tax funded as per the Law Commission
recommendation:

Jurors should continue to be paid at a
flat rate as set out in the Jury Rules 1990, but where a
juror can demonstrate actual financial loss in excess of
that flat rate, the registrar should have the discretion to
increase the payment to cover or contribute to the juror's
actual loss.

 The employer should pay
wages/salary to an employee on jury service, the Department
for Courts reimbursing the employer.

 There would
be an additional provision for payment of fees to
non-employee jurors.

(d) Alternative Union
Position: There should be a tax funded payment
for jury service that ensures vulnerable employees do not
suffer financial loss. Payment could be capped at a certain
level or at the discretion of the Registrar, so long as this
is targeted to achieve protection of lower waged employees.
Payment must also be timely, i.e. in the week of jury
service. The Law Commission recommendation may be acceptable
if the level of fees reflects this.

4. The
relationship between paid leave and the current provisions
for jury service fees See 3. above.

5. That
employer-paid leave does not assist those that are excused
because they are self-employed or contract
workers If payment for jury service is tax
funded this would apply equally to employees and
non-employees.

6. The recommendations of the Law
Commission In addition to the above, the
Advisory Group agreed with the recommendation of the Law
Commission that jurors should be allowed to defer their
service.

APPENDIX TWO

TERMS OF REFERENCE

Purpose of
the Advisory Group

The Advisory Group will advise the
Government on the current situation and possible future
policy options for amending the Holidays Act to:
ensure that the Act is both robust and appropriate to
accommodate increased diversity in working patterns;
 review entitlements to balance the needs of
employers and employees with a view to increasing
productivity; and note the manifesto statements
and any subsequent policy statements by the Government
Coalition Partners in relation to the Holidays Act.

The
Group will conduct its work in two phases:
information identification and gathering;
assessment of policy options.

Information identification
and gathering

The Advisory Group will identify what
information it requires to carry out its functions. Without
limiting the Advisory Group, the Government will ask that
consideration be given to: the existing
arrangements in employment agreements for annual leave,
statutory holidays, leave for bereavement or for the
sickness of the employees or their dependants, and any other
options for leave; international practice and
international standards and conventions in relation to
annual leave, statutory holidays and leave for bereavement
or for the sickness of the employees or their
dependants; the needs of employers in relation
to the provision of leave for their employees;
the needs of specific groups of employees for particular
types of leave under the Act; and the problems
that occur in relation to the present application of the
Holidays Act.

Assessment of policy optionsFollowing
the information-gathering phase, the Advisory Group will be
asked to consider and make recommendations on ways to ensure
that: entitlements under holidays legislation
are appropriate in contemporary society and labour
markets; the entitlements balance the needs of
employers and employees; and the entitlements
reflect and promote increased productivity.

In assessing
possible future interventions, the Group will be expected to
give consideration to: the Government’s wider
objectives for the labour market and for a growing and
dynamic economy; the costs and benefits of
alternative policy interventions; and any likely
implications of those interventions, including effects on
employment or income distribution.

The Group is expected
to note the attached Schedule of particular issues to be
considered.

ReportingThe Chair will be responsible for
ensuring that the Minister of Labour is kept informed of the
progress of the Advisory Group.

Within a month of being
appointed, the Advisory Group will meet to: 
confirm their terms of reference;  design a work
programme, including proposals for a research programme;
 have terms of reference and work programme
approved by Minister of Labour; and establish a
programme of monthly reports to Minister on progress.

The
final report of the Advisory Group shall contain policy
recommendations to the Minister.

SCHEDULE OF PARTICULAR
ISSUES TO BE CONSIDERED

Particular issues to be considered
by the Advisory Group are briefly outlined below.

Annual
HolidaysThe primary issue in relation to annual holidays
is whether the entitlement is increased from 3 to 4 weeks.
This is policy decision and need not be considered by the
Advisory Group.

Another major issue in relation to annual
holidays is the ability to “pay as you go” annual holiday
pay. Currently, this is permissible for employees of less
than 12 months. The 12-month limit is in accordance with the
objective of annual holidays as providing for rest and
recreation (an employee does not become entitled to paid
annual holidays until the completion of 12 months
service).

An option that may be considered by the Group is
whether to allow "pay as you go" annual holiday pay for
fixed-term agreements of 12 months of less.

Public
HolidaysThe primary issues in relation to public
holidays are:1. The entitlement to paid public holidays;
and2. Payment for working on a public holiday.

These
turn on the objective of public holidays. The overall
objective is the common observance of days of significance.
Beyond this, there appears to be a divergence in belief that
is reflected in the alternative ways that paid public
holidays may be provided. One view is that employees should
not be financially disadvantaged by the observance of a
public holiday. Another is that employees should be paid to
observe a public holiday.

The current position provides
for paid public holidays where they fall on days that would
otherwise be working days for the employee. Removing this
proviso introduces proportionality issues.

The Group may
consider whether and how these proportionality issues can be
taken into account.

The issue of payment for working on a
public holiday is linked to the current default provision in
the Holidays Act for employees in factories and
undertakings.

Employees in factories and undertakings are
currently paid a proportionate payment for a public holiday
(the “one tenths rule”), and by default double time for
working on a public holiday. For all other employees, this
issue is currently one that is for agreement between an
employer and employee(s).

Removal of the provisions for
factories and undertakings altogether may result in a
reduced entitlement for employees who are currently paid in
accordance with those provisions. It is not known what
proportion of the workforce are employed in “factories and
undertakings”, nor the proportion to who the provision
applies that contract out of the provision.

Special
LeaveThe primary issues in relation to special leave
are:1. The level of entitlement (including whether it is
expressed as “days” or “weeks”); and2. Whether special
leave should be split into two entitlements to (a) sick and
domestic leave and (b) bereavement leave.

These two issues
are interrelated; if the entitlement was split without an
increase to the current entitlement, it may in effect reduce
the current entitlement to one or the other.

The
expression of the level of entitlement as “days” or “weeks”
is an issue for reasons of proportionality. Although
expression as “weeks” addresses this to some extent,
problems would still arise where an employee works an
irregular number of days per week.

An issue that should be
considered by the group is how proportionality issues may be
taken into account.

Two other significant issues in
relation to special leave should also be considered:(a)
accumulation of special (or sick/domestic) leave; and
(b) the grounds on which an employee is entitled to take
special leave.

JURY SERVICE LEAVEThe following issues
should be considered in relation to Jury Service
Leave: whether there should be a right to leave
for jury service and, if so, for how long; how
any provisions regarding jury service leave would relate to
the Juries Act 1981 and Jury Rules 1990; whether
jury service leave should be paid and if so, how (i.e.
employer paid or tax funded), and at what rate (i.e.
replacement wages or fees); the relationship
between paid leave and the current provisions for jury
service fees; that employer-paid leave does not
assist those that are excused because they are self-employed
or contract workers; and the recommendations of
the Law
Commission.

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